The assessee was exhibiting films and making payments to the distributor. The revenue was shared between the theatre owner and the film distributor and it was neither a contractual payment nor a rent payment. The assessee relied on Circular No. 681, dated March 8, 1994 (1994)206 ITR 299 (St)   and Circular No. 736 dated February 13, 1996 (1996) 218 ITR 97 (St)  to support the contention that the payment was neither in the nature of contractual payment nor rental payment but towards its share for screening the film.  Tribunal held that the payment was made by the theatre owner who was exhibiting the films, and could not be held as rental payment. Similarly, the assessee was screening the films being the theatre owner, and it could not be held that the payment was a contract payment. Therefore, the Assessing Officer had not made out the case of either contractual payment or rental payment for holding that it attracted the tax deduction at source. The Department also did not make out a case that the assessee was in default for non-deduction of tax at source under section 201(1) . Hence, the disallowance was unsustainable and accordingly, the addition was deleted.( AY.2013-14)